Concept
The Evaluator Role
Lawyer as evaluator
Lawyer as Evaluator
The Evaluator Role
A lawyer usually works for the client alone. As advisor, the lawyer tells the client candidly where the client stands under the law. As advocate, the lawyer presses the client's position against an opponent. Rule 2.3 governs a third role, in which the lawyer examines a matter affecting the client and delivers the resulting assessment to someone who is not the client.1 Typical subjects include whether a seller holds good title, whether a business is validly organized and has authority to sell, and whether a stock offering complies with securities law. The rule's operative sentence permits a lawyer to provide an evaluation of a matter affecting a client for the use of someone other than the client, if the lawyer reasonably believes that making the evaluation is compatible with other aspects of the lawyer's relationship with the client.2
Many transactions close only when someone outside the client's circle can trust what a lawyer has found. A buyer cannot cheaply verify a seller's corporate records. A lender cannot easily trace a borrower's chain of title. Investors in a public offering cannot examine every legal fact for themselves. The client's own lawyer already knows the client's affairs and can investigate with access that no outsider has. The result is usually an opinion letter: the lawyer's signed statement of conclusions on a legal question, addressed to a third party who will rely on it. The client wants the deal to close, so the client asks the lawyer for the letter.
Whenever a fact pattern describes a lawyer examining title, corporate status, or regulatory compliance, ask first for whose use the assessment is prepared. Analysis of a matter affecting the client, delivered to the client alone, is counseling. The same analysis, delivered to a buyer, lender, or investor so that the recipient can rely on it, is an evaluation. The tax memo and the corporate-standing letter above could rest on the same investigation of the same company. Only the intended recipient moves one of them into Rule 2.3.
The evaluator role needs its own rule because it pulls the lawyer in two directions at once. A lawyer's ordinary work product serves only the client, so no outsider may rely on it and the lawyer's loyalty runs one way. In an evaluation, a third party acts on what the lawyer reports by paying the purchase price, making the loan, or buying the shares. That reliance makes sense only if the report is an honest, investigated assessment and not a partisan argument. Yet the lawyer remains the client's lawyer, and a report written for outsiders can expose the client's weaknesses or draw on what the lawyer learned in confidence. Rule 2.3 therefore permits the role and attaches conditions, so that the lawyer's duties to the client are not quietly turned against the client.
The rule is permissive: a lawyer may provide an evaluation. Its conditions decide when doing so is proper. The first is the compatibility condition already quoted, which requires the lawyer to reasonably believe the evaluation fits with the rest of the relationship with the client. The second applies when the lawyer knows or reasonably should know that the evaluation is likely to affect the client's interests materially and adversely. In that case the lawyer shall not provide it unless the client gives informed consent.3 The third keeps information relating to the evaluation protected by Rule 1.6, except as disclosure is authorized in connection with a report of the evaluation.4 The sections below take these conditions one at a time, using the business sale, the mortgage, and the public offering as running illustrations.